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AMN Healthcare (AMN) Q2 Earnings and Revenues Top Estimates

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AMN Healthcare Services Inc. (AMN - Free Report) reported second-quarter 2019 adjusted earnings per share (EPS) of 77 cents, which outpaced the Zacks Consensus Estimate of 70 cents. However, the bottom line declined 7.2% year over year.

The Zacks Rank #1 (Strong Buy) company reported revenues worth $535.2 million, which surpassed the Zacks Consensus Estimate of $527.1 million. However, on a year-over-year basis, revenues dropped 4.1%.

Segment Details

Nurse and Allied Solutions

In the second quarter of 2019, the segment’s revenues totaled $331.6 million, down 0.3% year over year.

Locum Tenens Solutions

The segment’s revenues amounted to $82.1 million, down 23.5% from the prior-year quarter.

Other Workforce Solutions

In the quarter under review, the segment’s revenues came in at $121.5 million, up 2.9% year over year.

AMN Healthcare Services Inc Price, Consensus and EPS Surprise

 

AMN Healthcare Services Inc Price, Consensus and EPS Surprise

AMN Healthcare Services Inc price-consensus-eps-surprise-chart | AMN Healthcare Services Inc Quote

Margin

In the second quarter, gross profit totaled $179.5 million, down 0.8% year over year. As a percentage of revenues, gross margin was 33.5% which expanded 110 basis points (bps).

Total operating expenses in the quarter were $131.7 million, up 16.9% year over year. Operating income in the quarter was $134.4 million, up 6.5%. As a percentage of revenues, operating margin was 8.4%, down 140 bps.

Guidance

For the third quarter of 2019, AMN Healthcare expects revenues within $560-$566 million. The Zacks Consensus Estimate of $557.3 million lies below the projected range.

Gross margin is expected at 33% while operating margin is estimated at 7.7%.

Adjusted EBITDA is projected at 12%.

Our Take

AMN Healthcare exited the second quarter on a solid note. The company gained from its core Other Workforce Solutions unit in the quarter. Management is upbeat about the latest Advanced Medical buyout, which is expected to expand the company’s travel as well as school therapy and travel nurse staffing capabilities. Expansion in gross margin is also encouraging. A solid view for the third quarter buoys optimism.

However, lackluster performance by the company’s Nurse and Allied as well as Locum Tenens Solutions is worrisome. In the second quarter, the company’s top and bottom line declined on a year-over-year basis primarily due to labor disruption in the Nurse and Allied segment as well as lower contribution from the Locum Tenens unit. Contraction in operating margin adds to the woes.

Other Key Picks

A few other top-ranked companies, which posted solid results this earnings season, are Stryker Corporation (SYK - Free Report) , Baxter International Inc. (BAX - Free Report) and Intuitive Surgical, Inc. (ISRG - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Stryker delivered second-quarter 2019 adjusted EPS of $1.98, beating the Zacks Consensus Estimate by 2.6%. Its revenues of $3.65 billion surpassed the Zacks Consensus Estimate by 1.4%.

Baxter delivered second-quarter 2019 adjusted EPS of 89 cents, which surpassed the Zacks Consensus Estimate of 81 cents by 9.9%. Its revenues of $2.84 billion outpaced the consensus estimate of $2.79 billion by 1.9%.

Intuitive Surgical reported second-quarter 2019 adjusted EPS of $3.25, which beat the Zacks Consensus Estimate of $2.85. Its revenues of $1.1 billion surpassed the Zacks Consensus Estimate of $1.03 billion.

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